IMA Prime Times: April 2020 Iowa Mortgage Association

April 2019

Unprecedented Times
We are definitely in a time a place that we will never forget. This will be something that will be shared throughout generations to come. Whether it’s working from home or reducing staff in the workspace around you, every one of us has been touched in some way by this pandemic.

We at the Iowa Mortgage Association are trying to provide you with information as we receive it. Please stay in touch with our Facebook and LinkedIn page for updates and information. Our president-elect, Tim Lamb, vice president Chuck Simmons and board member Nathan Smithey, along with Darcy Burnett hosted our first Zoom meeting on April 10 to share ideas and pass along some of the information that we have received. This was a great discussion talking about the current mortgage market conditions, forbearance information, creating strong peer groups, remote notarization and many other topics. We will be having a second zoom call roundtable on April 22, at 2 p.m. See details below. 

Lastly, please keep yourself safe during these time. Wash your hands regularly and limit your trips to necessary ones only. If we all work together, we will be able to get through this quickly.

Thank you.

Scott Brekke
Great Southern Bank

IMA Zoom Meeting Set for April 22
The Iowa Mortgage Association will host a moderated roundtable session on Zoom at 2 p.m. on April 22. Attendees will discuss how to sell in a challenging environment, remote online notarization, communication with your team and more. The session will be an exchange to provide a forum for mortgage professionals to unlock the value of peer collaboration, share best practices, vet new ideas and build productive relationships with fellow mortgage professionals. Register here.

URLA Implementation Delayed
In response to the COVID-19 pandemic, Freddie Mac and Fannie Mae have published a revised Uniform Residential Loan Application implementation timeline with extended milestone dates. The new mandated date for the use of the redesigned URLA and automated underwriting system specifications is March 1, 2021. The extension provides lenders and other stakeholders additional time to prepare and implement the redesigned URLA and the updated GSEs’ AUS specifications.

The CFPB recently published a HMDA frequently asked question related to race, ethnicity or sex information for mail, internet or telephone applications where the applicant does not provide this information — specifically, how to report whether this information was collected on the basis of visual observation or surname. If an applicant does not provide responses to such questions and the lender does not have the opportunity to collect this information based on visual observations (i.e., there is no in-person meeting during such an application process), the lender may report one of two things: (1) the information was not collected on the basis of visual observation or surname (Code 2); or (2) the requirement to report this data field is not applicable (Code 3). For consistency purposes, the CFPB suggests, but does not require that Code 2 be used.

GSEs Announce Flexible Appraisal Requirements Due to COVID-19
Effective March 23, 2020, Fannie Mae and Freddie Mac announced temporary flexible appraisal requirements with respect to certain loans because of the COVID-19 pandemic. The new flexible standards apply to all loans in process, and the GSEs note that they will remain in place for loans with applications dates of May 17, 2020, or earlier. Importantly, these new flexible appraisal requirements do not apply to new construction loans (for both GSEs), construction-to-permanent loans (in the case of Fannie Mae), or “Construction Conversion” or “Renovation” loans (in the case of Freddie Mac).

Under these new requirements, loans to purchase a primary residence (subject to LTV ratio requirements), and loans to purchase secondary homes or investment properties where the borrower’s LTV ratio is less than or equal to 85%, may be supported by traditional (i.e., interior and exterior) appraisals, desktop appraisals or exterior-only appraisals (although the GSEs encourage lenders to use desktop appraisals over exterior-only appraisals). Loans to purchase secondary homes where the borrower’s LTV ratio is greater than 85% may only be supported by traditional appraisals.

In the context of refinances, when the loan being refinanced is owned by the GSE in question, a Fannie Mae limited cash-out refinance and a Freddie Mac no cash-out refinance may be supported by a traditional appraisal or an exterior-only appraisal. When the GSE in question does not own the loan being refinanced through a limited or no cash-out refinance, or when it is a cash-out refinance (regardless of whether the GSE owns the loan being refinanced), a traditional appraisal is required.

Fannie, Freddie Revise COVID-19 Servicing Guidance to Reflect CARES Act Changes
Fannie Mae and Freddie Mac have issued updates to their servicing guidelines for servicers working with borrowers affected by the coronavirus pandemic. The updates reflect changes from the recently enacted CARES Act. Among other things, the new guidelines eliminate the requirement that servicers determine the occupancy status of a property; require servicers to suspend credit reporting when the hardship is related to COVID-19; and require that borrowers be provided an initial forbearance plan for a period of up to 180 days that may be extended for up to an additional 180 days at the borrower’s request. Read Fannie Mae Lender Letter LL-2020-02. Read Freddie Mac Bulletin 2020-10.

Foreclosure and Eviction Relief in Connection With COVID-19 National Emergency
The USDA issued an announcement to inform lenders of a foreclosure and eviction moratorium for all USDA Single Family Housing Guaranteed Loans Program loans for a period of 60 days, in connection with the presidentially declared COVID-19 National Emergency. Effective immediately, borrowers with USDA guaranteed loans are subject to a moratorium on foreclosure for a period of 60 days. The moratorium applies to the initiation of foreclosures and to the completion of foreclosures in process. Similarly, evictions of persons from properties secured by USDA guaranteed loans are also suspended for a period of 60 days. In addition, deadlines of the first legal action and reasonable diligence timelines are extended by 60 days. Loan servicers seeking to assist SFHGLP borrowers may also pursue any of the relief options referenced in Chapter 18 of the program Handbook.

To remove yourself from this mailing, click here.